While struggling public universities worry about fall enrollment, this mid-Michigan private college got CARES Act support courtesy of Education Sec. Betsy DeVos.
ALBION, MI — As higher education institutions brace for a hard year with enrollment figures still uncertain, one private liberal arts college has brought in a major windfall of aid to prepare for the fall semester.
Albion College not only got over $1.5 million from the Coronavirus Aid, Relief, and Economic Security (CARES) Act’s higher education fund, but it pulled in one of Michigan’s largest Paycheck Protection Program forgivable loans with between $5 and $10 million, and got a no-strings attached gift of over $7.5 million. All told, the liberal arts school potentially received up to $20 million in funding during the novel coronavirus pandemic.
Albion’s normal annual budget is around $80 million, reports the Battle Creek Enquirer, meaning support during the pandemic has almost made up a quarter of Albion’s entire annual operational cost.
Breaking Down Albion’s Financial Support
The CARES Act allocated $14 billion for higher education support during the coronavirus pandemic. Of that, a large proportion was diverted to private colleges like Albion, The ’Gander reported. This included half a million to the Wright Graduate University in Wisconsin, which the New York Times identified as a potential front for a cult.
Education Secretary Betsy DeVos, one of the few cabinet officials of President Donald Trump to stick around through his entire first term, influenced the disbursement of coronavirus funds for both K-12 and higher education to favor private institutions, the Times reported.
Albion received around $1.5 million of the CARES Act’s higher education funds.
Albion also collected money from the PPP, a program designed to bolster small businesses and minimize layoffs during the pandemic. If spent according to the authorized uses, the money loaned to businesses under the program would be forgiven. And despite the difficulty many small businesses have had in getting PPP loans, including small farms, those who did get money have not always been small businesses.
According to Albion’s PPP filing, the school employs 498 faculty and staff. At minimum, that means Albion’s $5-10 million PPP loan cost taxpayers more than $10,000 per employee.
And lastly, the college has received the largest private gift in its history: $7.5 million in unrestricted cash. That money, from the estate of former Albion student Robert Richmond, is something the school’s president, Matthew Johnson, called essential.
“Unrestricted gifts allow for small colleges to be at their best, to be strategic, to seize opportunity and to focus with their students on the current challenge, issue or opportunity,” Johnson told MLive. “Unrestricted gifts make that possible and allow for colleges to be nimble as well as strategic.”
Richmond’s family said he would be pleased to support the college during the pandemic.
Altogether, the package of support from taxpayers and Richmond came to around $12,000 per student.
Albion’s Windfall Is Not Normal
While private schools like Albion, supported by the nation’s education secretary, don’t have to gamble as much on enrollment figures, public schools like Houghton’s Michigan Technological University are concerned about how a drop in enrollment would impact their financial situation going into the fall.
“We’ve had a certain number of students cancelling their enrollment decision or postponing their enrollment decision because they don’t want to be away from home if something happens,” Kyle Rubin, director of admissions recruitment for Michigan Tech, told The ’Gander. “What if there’s an outbreak and they can’t leave or what if mom and dad get sick and they have to go home? Those kinds of things are going through student’s minds.”
That has a lot of colleges nationwide concerned. Universities that once could make acceptance letters a coveted prize are dipping into their waitlists as enrollment trickled in this summer.
“About 15-25% of students are rethinking either their college choices or whether they go at all,” said Rubin. “That’s sort of where we’re at. Every university is sort of dealing with the possibility of lost enrollment.”
And that, Rubin explained, would be financially devastating. Enrollment makes up the bulk of a university’s operational fund, and seeing that slashed by as much as one quarter while having to provide additional supplies is a daunting challenge.
Michigan Tech is fortunate in that it seems on track to meet the enrollment figures it needs to hit in the fall, Rubin told The ’Gander. But Albion is much more fortunate.
What Albion Is Doing With All That Money
Johnson said Albion will use the funds, particularly the unrestricted gift, to help the school prepare for a changing world. Johnson said 95% of Albion’s students wanted to resume in-person instruction as normal in the fall, meaning the school is preparing “COVID-19 kits” for incoming students.
Albion announced Tuesday an aggressive plan to test students, faculty, and staff for the coronavirus at several points in the fall semester and use student contact tracers to follow potential spread of the disease.
Albion’s 1,500 students pay roughly $45,000 in tuition each. That comes out to a little less than $70 million. The school is using some of its windfall to ease that somewhat — families that make less than $65,000 will be fully covered this year.
Over the last decade, Albion has also been heavily investing in the surrounding city as part of a long-term strategy to increase potential enrollment, and with the kind of cash the college got this summer, that investment is likely to continue.
Albion College financially backs the Albion Reinvestment Corp., a nonprofit spun off of the for-profit Forks Associates, which works closely with the publicly-funded Albion Economic Development Corp., and that close relationship makes pro-tem mayor Sonya Brown nervous.
“From a city standpoint, it is not an ideal situation,” Brown told the Battle Creek Enquirer, “because when you hear the concerns of residents and … you see the priorities being played out, it seems like that certain area connected to the college is what’s getting the most attention and being the most prioritized.”
Albion College did not respond to requests for comment.
This story has been updated to reflect a clarification on the types of support the school has received while the country battles the coronavirus pandemic.